Although Clause 17 is titled ‘Risk and Responsibility’ it also sets out other provisions relating to indemnities, limitation of liability and, unusually, the specific topic of intellectual and industrial property rights. The clause provides that the Contractor assumes responsibility and bears the risk for the care of the works during execution and for remedying any defects during the Defects Notification Period. Risk transfers to the Employer on issue of the Taking–Over Certificate to the extent of works defined as being completed. Generally, in construction contracts ‘risk’ is understood to mean an event or circumstance which causes delay, loss or damage to the Works. A risk can be said to be Employer caused, Contractor caused or neutral. The purpose of risk allocation is to determine which party bears the risk for such events. The Contractor may be required to remediate the damage at his own cost or the Employer may be required to pay for the damaged works. It has been stated that the “FIDIC standard forms are generally recognised as being well balanced because both parties bear parts of the risks arising from the project.”
Clause 3 deals with the duties and obligations of the Engineer and his assistants. Sub-Clause 3.1 deals with the role and duties of the Engineer. The Engineer is deemed to act for the Employer. The Engineer has no authority to relieve the Contractor of his duties, obligations or responsibilities under the Contract; nor can the Engineer amend the Contract. Under Sub-Clause 3.2 the Engineer can delegate authority to any assistants; however, the Engineer cannot delegate the responsibility to make Determinations. Under Sub-Clause 3.3 the Engineer may issue instructions or modified Drawings at any time, which are necessary for the execution of the Works. If the instruction constitutes a Variation, then it is dealt with under Clause 13 [Variations and Adjustments]. The Contractor is required to comply with any instruction given by the Engineer or delegated assistant. Sub-Clause 3.4 deals with the replacement of the Engineer. The Employer must not replace the Engineer with someone against whom the Contractor raises reasonable objection. Sub-Clause 3.5 deals with Determinations. When making a Determination the Engineer should consult with each of the Parties and, if agreement cannot be reached, make a fair determination in accordance with the Contract, taking due regard of all relevant circumstances. Both Parties are required to give effect to any Determination unless, or until, it is revised under Sub-Clause 20.1 [Claims, Disputes and Arbitration].
Clause 8 - Commencement Delays and Suspension by Taner Dedezade.
Click through to read Corbett & Co.'s helpful commentary on FIDIC 1999 book Clause 15
Clause 4 sets out various obligations which fall on the Contractor under the Contract and which cannot easily be classified elsewhere. The obligations under Clause 4 are of a wide range covering 24 different topics. Sub-Clause 4.1 sets out the Contractor’s general obligation to carry out his duties in accordance with the contract. Clause 4 of the FIDIC Red Book 1999 amalgamates various Contractor obligations under one provision. However this Clause 4 is not exclusive as there are also other Contractor obligations scattered throughout the Contract. Other significant general obligations which could equally have been included in Clause 4 (and which should be read in conjunction with this Clause 4) are as follows: • Sub-Clause 1.3 [Communications] • Sub-Clause 1.7 [Assignment] • Sub-Clause 1.8 [Care and Supply of Documents] • Sub-Clause 1.9 [Delayed Drawings or Instructions] • Sub-Clause 1.10 [Employer’s Use of Contractor’s Documents] • Sub-Clause 1.12 [Confidential Details] • Sub-Clause 1.13 [Compliance with Laws] • Clause 6 [Staff and Labour] • Clause 7 [Plant, Materials and Workmanship] • Sub-Clause 8.2 [Time for Completion] • Sub-Clause 8.3 [Programme]
Corbett & Co. has devised a helpful commentary on FIDIC 1999 books Clause 2. Clause 2 sets out certain obligations which are imposed on the Employer; however, this is by no means all the Employer’s obligations. The obligation to pay the Contractor, for example, is found in Sub-Clause 14.7 and the obligation to Take-Over the Works is found at Sub-Clause 10.1. The first obligation imposed on the Employer under this Clause is to give to the Contractor a right of access. Sub-Clause 2.1 needs to be read alongside Sub-Clauses 2.3 and 4.6, which make it clear that possession of the Site need not be exclusive. Sub-Clause 2.2 imposes on the Employer an obligation to assist the Contractor when requested to obtain permits, licences or approvals required by the laws of the Country. The obligation to reasonably assist is not an absolute obligation and generally will not mean the Employer will have to expend money on fulfilling the obligation. Sub-Clause 2.3 imposes on the Employer an obligation similar to that imposed on the Contractor under Sub-Clause 4.6. The Employer is responsible for any failure by its personnel to co-operate with the Contractor or to comply with safety regulations, take care of persons on Site, make sure the Site is reasonably free from unnecessary obstructions, and protect the environment. Sub-Clause 2.4 imposes on the Employer an obligation to show that financial arrangements have been made and are in place to enable it to pay the Contract Price. Sub-Clause 2.5 deals with the Employer’s Claims and requires that the Employer give notice and particulars of its claim before the Engineer makes a Determination under Sub-Clause 3.5. The Employer cannot set-off any claims it may have against the Contractor unless it complies with this Sub-Clause.